The process of growing in small firms: Exploring dialectic adjustments to nonroutine disruption

ABSTRACT

Studies examining small firm growth have suggested that growth is complex due to the multitude of internal and external factors that disrupt it. However, in focusing mainly on external factors and paying less attention to internal factors, the process of growing – or what is happening inside a small firm as it grows – remains undertheorized. Using findings from a real-time case study of a small firm and insights from the dialectical perspective, we develop a theoretical model that illustrates growth as a dynamic process occurring through dialectic adjustments in response to disruptions that cannot be resolved with routine practices. Our findings suggest that these disruptions trigger one of two situations – potentially converging or potentially diverging – in which individuals must adjust by connecting their insights (converging) or breaking connections (diverging). As such, our findings illustrate the variability in growing, compelling small firms to complexify their internal workings through dialectical adjustments in response to ongoing nonroutine disruptions.

KEYWORDS:

• Dialectic adjustments
• growing process
• small firm growth
• nonroutine disruptions

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

¹ Although the sizes of small firms vary widely based on the industry the firm is in, the US Small Business Administration (SBA) generally defines a small business by firm revenue (ranging from $1 million to over $40 million) and by employment (from 100 to over 1,500 employees) (Hait, 2021). During the research, Digital 100 grew from 80 to approximately 120 employees, with plans to continue growth to mid-size.

² We recognize that diversity exists in how the findings are presented, with some studies presenting findings descriptively, allowing theoretical concepts to emerge later. In contrast, others integrate theorized contacts within the findings section (Howard-Grenville et al., 2021). Because we utilized theory in our data analysis, we aligned our findings with our data analysis procedures and integrated theoretical constructs into the findings section.

³ The redesign of the new-age payment processing tool was triggered by a customer’s question and further conceptualized during one of the company-wide brainstorming sessions.

⁴ Many of the customers that Digital 100 serves are technologically savvy. They occasionally join meetings and interact directly with Digital 100 engineers and programmers.